I thought I might have another go at anti-democracy sentiment in the USA as it relates to bad economics in the conservative style and its sequelae this week. How about them level problems?
As I mention, often, neoclassical welfare economics is an ethical half-theory (at most) because it does not address the ethics of resolving interpersonal conflicts. In economic contexts, those ethics relate to economic power: the definition, distribution, use of economic power.
The definition of economic power concerns laws relating to property, ownership, legal property “rights,” who owns what and why, under the law. Neoclassical welfare economics does not contain an ethical theory of who should own what or why. If one imagines the results of any set of laws about who owns what and why and changes it around so rich become poor, poor become rich, neoclassical welfare economics will not be able to rank the two outcomes as far as normative or ethical superiority.
The distribution of economic power concerns laws governing the pattern of economic power and includes all those legal arrangements, mechanisms that play into that, as labor markets (with or without unions, market failure, etc.), capital markets, inheritance, policies, etc. Neoclassical welfare economics does not contain an ethical theory about how economic power should be distributed, for example, it does not present an ethical theory proposing one’s economic power should correspond to one’s productivity or contribution to profits or what have you. If one imagines the results of any set of distributional mechanisms and then changes it around so rich become poor, poor become rich, neoclassical welfare economics will not be able to rank the two outcomes as far as normative or ethical superiority.
The use of economic power concerns whether, in any given instance of resolving an interpersonal conflict of preferences, allocating some good, society goes with markets or something else. For example, in the case of scarce vaccines, we allocated by medical need not via markets. Neoclassical welfare economics does not contain an ethical theory that says given the choice between resolving some conflict of preferences, allocating some good, via economic power in markets versus some other system one should choose markets. If one imagines the resolution of any particular interpersonal conflict of preferences using markets, then changes it around to give a different resolution, neoclassical welfare economics will not be able to rank the two outcomes as far as normative or ethical superiority.
What neoclassical welfare economics does is set aside all or most of the thorny ethical issues addressed by democratic government, law, then discuss some typically relatively trivial issues that apply once those more significant issues are off the table. This structure has created a great deal of confusion over the years. One common idea is that because neoclassical welfare economic theory does not take up the ethics of economic power, those issues are unimportant for evaluating real economic systems, outcomes, policy. So, for example, one may find bad economists saying it doesn’t matter who owns what, as long as someone owns it, or economic power plays no role in market outcomes, or that market solutions are inherently superior to non-market solutions, and so on.
The segregation and suppression of the role of economic power and the ethics of economic power lead many to view markets as peculiarly free of power interactions and examples of simple voluntary cooperation. Everyone agrees the poor kid may buy a crust of bread, etc. The illusion is obviously helped if one agrees the laws relating to the ethics of economic power one is attempting to suppress awareness of, push into the background, segregate. If one sees problems or issues, the ethics of economic power does tend to become rather more visible. The segregation and suppression of the role of economic power is what gives the rhetorical power to more stridently anti-democracy forms of bad economics and sequelae, such as “libertarianism,” in which markets are meant to be “freedom” and democratic government “tyranny.” It also informs the form of fake anarchism that, rather than taking certain laws for granted, proposes once democratic government, law, is out of the way, people will naturally and organically agree all the ethical issues democracy, voting, law were meant to address. (There’s an unrelated form of utopian anarchism which neither takes laws for granted nor supposes laws relating to economic power will arise naturally but welcomes the violent struggle over resources that accompanies real anarchy as a sort of social Darwinist test of merit.)
What’s happening is they’re trying to push the role of government, law, in resolving interpersonal conflict, allocating resources, the ethics of economic power, into the background, take if off the table, segregate it as different in kind from government, law at later stages. Basically, they’re trying to reproduce in reality the presentation of markets in the ethical half-theory of neoclassical welfare economics as transmitted via false, misleading, anti-democracy bad economics in the conservative style. In reality, there is no essential conceptual difference between addressing ethics relating to economic power, resolving interpersonal conflicts, allocating resources, at one point in law or another. One may allocate vaccines by medical need without overhauling markets generally. It’s basically a form of what I call a “level issue” in which the same concept, here laws relating to economic power, resolution of interpersonal conflicts, allocation of resources, may appear at different points of an argument, theory, system, creating confusion.
If one accepts laws relating to economic power are based ultimately in democratic government, there is no obvious rationale for rejecting later revision by democratic government. Not accepting that basis of law suggests anti-democracy sentiment that may well imply criminality. When some discover in a democracy laws may be generated affecting economic power they don’t personally approve, it becomes clear that although at one level acceptance of democratic government may be voluntary, at another level the laws produced may not be always to one’s liking. This makes some propose democracy a form of tyranny in which others may use state power to enforce their will on one. They dream of a system more like their false image of markets, in which interactions are ostensibly purely voluntary, power irrelevant. However, there is no such system. The ethics of resolving interpersonal conflicts of preferences, allocating scarce resources must be addressed, and will be, one way or another, in any economic system. It’s simply another level issue, where and how is it done and by who? Thus may one be led either to fascism, the hope a like-minded authoritarian despot will support only laws relating to economic power one personally approves, or to utopian anarchism, the notion without democracy everyone will naturally agree those ethics, laws on economic power.
Fighting anti-democracy sentiment means first and foremost fighting anti-democracy bad economics in the conservative style and its sequelae, differentiating them from neoclassical welfare economics, addressing the confusion and conflict academic economists have so long promoted.
